Stocks May Show A Lack Of Direction In Early Trading – U.S. Commentary

Following the strong upward move seen last week, stocks may show a lack of direction in early trading on Monday. The major index futures are currently pointing to a roughly flat open for the markets, with the Dow futures up by just 3 points.

Traders may be reluctant to make significant moves ahead of the release of quarterly financial results from a number of big-name companies this week.

Netflix (NFLX), Goldman Sachs (GS), Johnson & Johnson (JNJ), Morgan Stanley (MS), American Express (AXP), IBM Corp. (IBM), Microsoft (MSFT), and General Electric (GE) are among the companies due to report their results in the coming days.

Nonetheless, some buying interest may be generated in reaction to a report from the Commerce Department showing retail sales in the U.S. increased in line with economist estimates in the month of June.

The report said retail sales climbed by 0.5 percent in June after soaring by an upwardly revised 1.3 percent in May. Economists had expected sales to rise by 0.5 percent compared to the 0.8 percent increase originally reported for the previous month.

Excluding a jump in auto sales, retail sales still rose by 0.4 percent in June following a 1.4 percent spike in May. The increase in ex-auto sales also matched economist estimates.

A separate report from the Federal Reserve Bank of New York showed New York manufacturing activity continued to grow at a fairly brisk pace in July, although the pace of growth slowed from the previous month.

While the New York Fed said its general business conditions index dipped to 22.6 in July from 25.0, a positive reading still indicates growth in regional manufacturing activity. Economists had expected the index to drop to 22.0.

Shortly after the start of trading, the Commerce Department is scheduled to release its report on business inventories in the month of May. Business inventories are expected to climb by 0.4 percent.

Traders are also likely to keep an eye on the highly anticipated meeting between President Donald Trump and Russian Presidential Vladimir Putin, with the two leaders due to hold a press conference not long after the open.

After ending Thursday’s trading substantially higher, stocks turned in a relatively lackluster performance during trading on Friday. Despite the choppy trading, the Nasdaq hit a new record high and the S&P 500 reached its best closing level in five months.

The major averages fluctuated over the course of the session before closing modestly higher. The Dow rose 94.52 points or 0.4 percent to 25,019.41, the Nasdaq inched up 2.06 points or less than a tenth of a percent to 7,825.98 and the S&P 500 edged up 3.02 points or 0.1 percent to 2,801.31.

For the week, the Dow surged up by 2.3 percent, while the Nasdaq and the S&P 500 jumped by 1.8 percent and 1.5 percent, respectively.

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Monday, with the Japanese markets closed for a holiday. China’s Shanghai Composite Index slid by 0.6 percent, while Australia’s S&P/ASX 200 Index fell by 0.4 percent.

The major European markets have also moved to the downside on the day. While the U.K.’s FTSE 100 Index has slumped by 1 percent, the French CAC 40 Index is down by 0.3 percent and the German DAX Index is down by 0.1 percent.

In commodities trading, crude oil futures are plunging $1.59 to $69.42 a barrel after climbing $0.68 to $71.01 a barrel last Friday. Meanwhile, an ounce of gold is trading at $1,241.90, up $0.70 from the previous session’s close of $1,241.20. On Friday, gold fell $5.40.

On the currency front, the U.S. dollar is trading at 112.34 yen compared to the 112.38 yen it fetched at the close of New York trading on Friday. Against the euro, the dollar is valued at $1.1714 compared to last Friday’s $1.1685.

by RTTNews Staff Writer

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